By on July 28, 2011

Checking in on Saab, which becomes as cheerful as visiting a relative in a hospice, we hear that Saab can’t make payroll again. Says The Local: “Saab informed white-collar staff on Tuesday that they would not receive their salaries on time this month. According to a report in the Dagens Industri (DI) business daily, the money will be delayed due to the non-payment of a installment from Bahamas-registered fund Gemini.”  The natives are getting restless: A local politician demands Victor Muller’s head.

“We need a new CEO,” said Paul Akerlund, chairman of the Trollhättan municipal council. “I do not think Victor Muller is a good president. He has not enough knowledge about how to manage production and development,” Akerlund told the Svenska Dagbladet.

It might be too late to look for a replacement. In Sweden, they are talking bankruptcy, yet again.  The Helsingfors Dagblad finally asks:

“How long can a company in the manufacturing sector continue to operate without producing any goods? How long can you keep employees who have no work to do?”

Not very much longer, it seems. On Wednesday alone, 15 companies registered unpaid debts with the Swedish enforcement authority Kronofogden, Dagens Industri says. Saab has ten days to respond.  The union representing the unpaid white collar workers also filed its demand notice. Unless Saab finds new funds, it’s lights out.

Where is the Russian financier when Saab needs him? Dagens Industri thinks he’s behind the non-arrival of the Bahamian funds. Gemini is “considered to have close ties to Vladimir Antonov,” says the paper. Antonov says it ain’t true.

Today, Dagens Industri talked to Lars Holmqvist, head of the European supplier association CLEPA. He was told by  European Investment Bank (EIB) President Philippe Maystadt that the bank “will never approve Vladimir Antonov as co-owner of Saab Automobile.” Maybe that’s why the funds from the  Bahamas  “have been stopped at the border.” Latter wording courtesy of Inside Saab, where the former blogger Steven Swade tries his hand on mastering the art of spin. Sure, the nasty Swedish customs did it.

Promising that we will be back in a few days, we fluff the pillows and leave our patient.

Ah, let’s see what Saab’s cheering section at Saabsunited has to say. They are shooting deserters:

“I don’t know why, but people seem to be angry versus Saab. I don’t know what Saab has done to some people, but it is clear to me that some people are concentrating all their anger towards Saab. It is really sad, as the world would be much nicer without anger. I still don’t know why people go to enthusiast sites like this just to try to convince other people that they should stop being interested in Saab.”

Because the end is near, perhaps?

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23 Comments on “Saab’s Last Gasp...”

  • avatar

    Very sad. I really hoped that Victor could pull this off.

    I’m supposed to be at the Saab Museum in Trollhatten a week from Tuesday, hoping it is still open for visitors! Going there and to the Saab International in Finland as part of my BMW European Delivery trip. Yes, am a deserter, but I do love the brand.

  • avatar

    I think Saab is very lucky to have a CEO as passionate and untiring and ever-optimistic as Victor Muller. The company would be gone at least a year ago if it weren’t for Victor Muller. But Saab is in such a precarious condition that I doubt anyone can save Saab. Not even Alan Mulally, I think. Or Carlos Ghosn. Or anyone else for that matter. Well, maybe the Pope can… at least he can ask all Catholics worldwide to donate money to their church to save Saab…

    • 0 avatar

      He might be untiring and passionate, but he forgot that a car company is supposed to make cars …

    • 0 avatar

      The problem is that Victor Muller is too passionate and untiring and ever-optimistic. That means he is so focused on what he wants Saab to be in the future that he has not been properly managing the reality of what Saab is now. A perfect example of this can be found in the inside Saab blog, when Swade writes:

      “Sales in 2010 were much lower than expected, and for several reasons. The end result was lower-than-expected cashflow and slower payments to suppliers than we would have liked. This reached a head earlier this year and the consequences included the factory stoppage that persists today.”

      When Saab’s sales were lower in 2010 than expected, than Mr. Muller should have dropped his pie in the sky dreams for Saab and been much more proactive in cutting overhead and costs at Saab (That would include labor, which is admittedly more difficult to remove in Sweden than here in the US where I am sitting). Of course that wouldn’t happen, as doing so would delay Muller’s grand vision, so instead of a company producing slightly uncompetitive cars for a few more years we have a company building no cars…

      Mr. Muller would probably be far more effective serving as just the Chairman as Saab, as oppose to Chairman and CEO as he is now. He could still help steer Saab in the direction he wants the company to go, while allowing some one more capable to actually manage the company.

      Of course this is all moot now, as Saab is way pass the point where a management change can help the company.

      • 0 avatar

        When Saab’s sales were lower in 2010 than expected, than Mr. Muller should have dropped his pie in the sky dreams for Saab and been much more proactive in cutting overhead and costs at Saab

        I haven’t seen their numbers, but I seriously doubt that there were significant costs to cut. (It’s not as if they can stop offering steering wheels and seats in order to save money, or get the workers to show up for half of their current wages.)

        Saab’s problem is a revenue problem. Saab has a revenue problem because very few people like their cars enough to plunk down their money to buy them.

        Making cars is expensive, which creates a natural pressure for automakers to seek economies of scale. Combine that with globalization (which gives companies a chance to chase economies of scale), and a company as small as Saab has little chance of survival as a standalone company. It only lasted as long as it did because GM spent years throwing money at it.

        If Saab is to survive, then they need to increases prices or volume. The odds of either strategy being successful seems low, though, given the lack of brand equity. It’s too bad, but there just aren’t enough fanboys with enough money to save it.

  • avatar

    What? You still here? Shoo, fly!

  • avatar

    Heaven bless Saabsunited. They’re like the band on the Titanic. Com’on VAG, picking up SAAB would be pocket change for you.

    • 0 avatar

      Whats in it for VAG though? They don’t really need the company, and are still trying to juggle and control the identity and placement of the many brands that they have (especially in Europe).

  • avatar

    If one desires an insight into a supplier’s mentality vis-a-vis a seemingly bankrupt customer, then see my comments below Bertel’s SAAB piece from several days ago:

    After the first supplier to file proved the concept of “squeakiest wheel gets the remaining cash out of a cash-poor customer”, the other suppliers, with, if viewed from a short-term perspective, less to lose and more to gain (or with, if viewed from a long-term perspective, more to lose and less to gain) will follow-suit.

    I’ve been cautious with my comments up until now, avoiding the “let SAAB die with dignity already” b.s. that I’ve seen elsewhere.

    However, given the proof-of-concept mentioned above, and despite the fact that Muller has been making a game effort at sticking fingers in a leaky dyke, unless much greater funding, deus-ex-machina like, appears to really get SAAB on its feet, the creditors and scavengers, like vultures with carrion, will stop circling and begin to peel the flesh from the bones, and SAAB’s life as we know it will be over.

    • 0 avatar
      DC Bruce

      Of course I know nothing about Swedish bankruptcy laws, but under U.S. law payments to creditors made in the (IIRC) 6 months prior to the bankruptcy filing are voidable as “preferences” and subject to “clawback” (i.e. recovery) by the bankruptcy trustee for inclusion in the bankrupt’s estate, for eventual re-distribution to creditors according to the law and plan that they work out in the bankruptcy proceeding.

      The obvious purpose of these provisions is to discourage the kind of “take the money and run” behavior we’re seeing in play right now.

      Again, not knowing the provisions of Swedish law in this area, but in the U.S. this scenario would call for a voluntary “chapter 11” filing by the company itself to stave off creditors and force them into an orderly plan of getting paid, etc. that would allow the restructured company to continue in business. There are two conditions for this happening: (1) that the company be able to show itself as a viable business entity in the long-term (otherwise, the bankruptcy will be converted to a liquidation) and (2) that the company be able to secure debtor-in-possession financing to keep going while the company is in bankruptcy. The D-I-P lender gets preference ahead of everyone if things don’t work out, so the default risk is not too great . . . unless the company and/or its assets are worth less than the amount of D-I-P financing required.

      As summing that this remedy is available to Saab, the fact that the company hasn’t taken it suggests that it is not confident of being able to meet one, or both, of those conditions. One gets the strong flavor, from watching this, that Muller and his associates consider Saab a kind of vanity purchase — something that would be nice to have — like, say, owning a professional sports franchise in the U.S., which, on their merits are rarely big money-making propositions.

      This would all be fine and fun to watch but for the fact that there are real victims here: not the Saab fanboyz or even owners of Saab cars (like me), but the Saab employees and the Saab suppliers — many of which may be small outfits for whom this unpaid balance represents a substantial loss — who are left holding an empty sack. I’m just guessing, but I’m guessing that the employees who elect to quit and go work for someone else will be forfeiting what could be a nice benefit package that they would get if the stayed to retirement age — assuming of course, that the company survives. So they’re given a difficult choice between staying or giving up and going.

      This is just really unfortunate.

      • 0 avatar

        If the company pensions in Sweden are like those here in Switzerland, then the funds inside it belong to the employee, and if the employee changes companies all of those funds move with him.

    • 0 avatar

      Robert: I missed your vituperative, but well written reply to my comment on the 22nd. I am chastened. I am not an “anti-bailout whacko” as you may think but I do have a growing frustration with the lack of financial acumen in our government evidenced by the current Debt Limit Fiasco. I feel the same about the EU’s government(s). Maybe GM and Chrysler should have been saved, but SAAB is a bridge too far.

      • 0 avatar

        Thanks. I share your frustration (it’s an issue that has been brewing via 40 years of backward-looking bi-partisan policy failures.) The biggest problem in the EU is also due to policy, in that they did a full-currency union, a partial market and legal union, and a lousy cultural union (they should have pushed english like 50 years ago as the Lingua Europa (among major industrial nations or blocks, the US is alone with a common language.) GM’s and Chrysler’s rescues have to be viewed in terms of “Opportunity Cost”, and measured not against the “few” billions they will cost in the end, but against what the cost would have been if the companies had been liquidated and all those tax receipts had disappeared, and massive PGBC and FICA payouts had been made. Agree SAAB seems a lost cause and the macro economic situation is not what it was in 2009, and SAAB is not nearly as critical to the Swedish economy or consumer confidence as GM/CLLC were in the US then. (Sorry if I was unduely, or unfairly, tough on you, I was just rubbed the wrong-way by comments which seemed unproductive and over the snark-line.)

  • avatar

    Muller was equally optimistic about Spyker’s ability to run an F1 team. Actually, Spyker’s F1 fandango looks a lot like what has unfolded at SAAB. There’s the same pattern of confident statements that soon prove to be unfounded and underneath it all is Spyker’s lack of capital. If you substituted “SAAB” for “Spyker F1” in this article in from August 2007 you wouldn’t be too far off:

    “In a statement, Spyker said that the negative publicity over the state of it’s [sic] finances and credit worthiness had forced them to secure additional funds to secure their short term liquidity position and to continue investments.

    [Spyker Cars NV] … are expecting to make a loss in 2007 and have revealed that the F1 part of the team would not be ‘cash neutral’ thanks to higher than anticipated costs, and lower revenues …

    … many people at Spyker F1 have said that the team is not in jeopardy. … Colin Kolles, boss of Spyker F1, has said … ‘Spyker F1 Team Ltd is completely confident that it has the necessary budget to race in the FIA Formula One World Championship this season.\'”

    The team was sold the next month.

  • avatar

    Saab had a good run but just can’t live without a wealthy suitor to influx cash into it routinely (reason why Saab was sold to GM). The car market is mature and does not have the growth / sales to support a straggler (my same sentiments with pre Fiat Chrysler). Let them go bankrupt and others will buy up the pieces that actually held value. Remember Saab for its true products (before the GM rebadging fiasco).

  • avatar

    The Saab story is nothing special.
    They failed to create a line of cars for new entry level buyers. Instead they made one very good car for the same kind of buyer. Swedish fashion buyers. When Saab fell out of fashion, these buyers moved on. Saab had no one else to replace these driver. Fashion buyers don’t buy cars that are out of fashion. Instead of Saab, these fashion shoppers switched to the new fashion – BMW.

    Fashion shoppers are not loyal. You cannot survive on them alone. Saab loyalists love Saabs, but there were not enough of them.

    So, Saab is history.

  • avatar
    Charles T

    Brand-new 2011 9-5 Aeros are being advertised in Cape Cod with $14k off MSRP. If they need that much money on the hood in the cradle of Saab in the US, that’s a sign.

  • avatar

    I don’t know of anyone that is excited by SAAB, most people think they went out of business already, like Pontiac, Hummer, and Saturn.

    A 2011 SAAB may turn out to be a rare collectable some day, how about a Barrett Jackson auction 20 years from now for a low mileage 9-5?

  • avatar

    In the mid-late 80’s and early 90’s Saab occupied a unique and happy niche. There’s a Saab 900 Turbo sitting in my driveway, which is fun to drive, will move a full-size couch (its a hatchback, and the rear sit folds down) and has 120,000 miles on the odometer. About every week I get an offer from someone who wants to buy it.

    I peg Saab’s current problems with a shift in product strategy that occured when they decided they wanted to make a version of a 3-series and went upmarket, lost their utilitarianism, and of course started in with the GM /Opel platform sharring. This was in the mid-90’s, and they simply turned their back on a loyal and profitable segment of the market becuase of crap management strategy.

    So, yeah, big surprise, GM snatches defeat out of the jaws of victory once again, and we’re still seeing the results play out.

  • avatar

    If Saab was a country, it’d be any of the UPIIGS. It has nothing. Does nothing. Produces nothing.

  • avatar

    I just checked Saab’s website, and it looks like they’re still leasing – what the…?

    OK, hypothetically speaking, if one were to lease a Saab right now for 3 years, and the company went under before the lease expired, what would happen?

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